The new Commission probe relates to hot rolled steel of the sort produced at Tata’s Port Talbot plant, where thousands of jobs are threatened.

If the use of subsidies is found then Brussels could slap tariffs on Chinese steel imports.

Business Secretary Sajid Javid said: “This is welcome news for British steel, particularly Port Talbot which produces nearly a million tonnes of this type of steel every year.

“It’s exactly the action we have been pushing hard for in Europe and this type of investigation, the first of its kind, means anti-dumping tariffs can be imposed much earlier.”

An anti-subsidy probe of this type would normally take up to the nine months but the UK Government is pressing for it to be completed sooner.

However, Mr Javid has been accused of failing to back the British steel industry by opposing a previous attempt the EU to block the dumping of cheap Chinese steel.

The Government was against the scrapping of what is known as the “lesser duty rule”, arguing it would lead to higher prices for UK firms buying Chinese steel.

A spokesman for the Department for Business insisted it backed tariffs, where appropriate, but was against them being set too high.

The EU is already investigating if Chinese producers have been dumping cheap hot rolled steel, which could also lead to tariffs.

Gareth Stace, director of trade body UK Steel, said: “The significant unfair trading practices carried out by China has been a major cause of the worst steel crisis in over a generation here in the UK.

“Unfair trading practises only damage global trade and must be stopped.

“Furthermore, the Commission should take this opportunity to revamp the way it operates and speed up its investigation to ensure that it tackles the problem in the shortest possible time.”

Yesterday’s announcement came less than 24 hours after the European Parliament voted to against China being given coveted Market Economy status.

Approval would have made it much harder to impose tariffs on Chinese steel.